A 144-bed nursing home in Huntington Beach and a San Diego facility are under new ownership as part of a bankruptcy reorganization at the former operator.
The California Department of Health Services recently granted a six-month provisional operating license to Douglas Fir Holdings LLC for the Huntington Valley Healthcare Center, according to department spokesman Ken August. The facility was formerly known as SunBridge Care Center Huntington Valley.
Huntington Valley employs 110 people and provides short-term rehabilitation care and long-term custodial care.
SunBridge’s previous owner, Sun Healthcare Corp., ended its lease for the Newman Avenue nursing home and transferred it to Douglas Fir Holdings as part of its bankruptcy reorganization. The Albuquerque, N.M.-based company divested SunBridge for Huntington Valley and several other facilities because they were not profitable, said Greg Johnson, a Sun Healthcare spokesman. The company still operates about 35 Orange County facilities, he said.
Lee Sorensen, Huntington Valley Healthcare Center’s new administrator, said Douglas Fir is looking to make some changes with an eye toward profitability.
“It’s a great facility,” Sorensen said. “It’s a matter of enhancing the business once again with a stronger rehabilitative focus. Our one core business is strong skilled nursing rehabilitative care.”
Douglas Fir Holdings is part of the Plum Healthcare Group, a private San Diego company with five long-term care facilities in California. Plum also recently took over the operations at SunBridge Terrace Care Center in San Diego. Financial terms were not disclosed.
Sun Healthcare and other large publicly traded nursing home companies like Vencor Inc. and Integrated Health Services Inc. have sought refuge in bankruptcy court during the past couple of years. Nursing home industry representatives contend Medicare reimbursement cuts imposed by the Balanced Budget Act of 1997 are forcing industry restructuring.
A recent U.S. General Accounting Office study said the industry’s difficulties came about from nursing home chains and their investors making poor business decisions before Congress cut payments by 10%.
“The nursing home industry blames the government for its financial problems and wants more money, (but) their investors and bankers gambled on a vision of ever-growing largesse that wasn’t based on reality,” Republican Sen. Charles Grassley of Iowa said during a Senate Aging Committee hearing last month.
That situation is different for smaller operators like Plum Healthcare Group, Sorensen said. Nursing homes aren’t ancillary businesses for Plum, he said.
“The reimbursement changes are of concern,” he said. “However, we are confident that we’ll have a strong delivered service that is profitable in this reimbursement environment.” n
